Evaluating the Publishers: Part 1 - On the Edge

Evaluating the Publishers: Part 1 - On the Edge

Will THQ collapse under its falling stock? Will SEGA rebound from its recent staff cuts and cancellations? Was Ninja Gaiden 3 detrimental to Tecmo's future? These are just a few of the questions that have circulated the gaming world in recent months. But they all focus on the same issue - who are these giants called "publishers," and how are they really doing?

The recent updates about THQ spurred me to complete this feature, which has been a long time in the making. Five years ago I began a personal database to track the industry's largest players, focusing on their portfolios and the developers and IP they own. Over time, the database grew, as it tracked the rise and fall of talent, the closing and buying of studios, and the success of dozens of franchises. I can't claim to have a perfect analysis of every company - there is simply too much involved in the success or failure of these publishers, and much of the information is never disclosed to the public. But we'll be looking at twenty of the major players during this multi-part feature, and have categorized them by their situation today.

In part one, we'll be looking at the publishers that are struggling. The rankings are not based off of personal likes or dislikes, size of the companies, or stock price. What we're more interested in is stability and growth - financially, staff size, amount of titles, etc. We're also interested in the diversity/depth of a portfolio, and the general quality of the titles in that portfolio.

I'd love to hear your feedback below, including your thoughts on whether you think these publishers will survive in the next generation of consoles.


1. THQ

The very public troubles of THQ were the most immediate prompt for these features. In the last year or two THQ has made multiple rounds of cuts and layoffs, they have closed studios, and they have abandoned many of their old licensed franchises. Their stock price has dwindled to under $1, and THQ has been notified by Nasdaq that they will be de-listed soon if they can’t turn things around.

Sounds pretty dismal, doesn’t it? If we had to bet on it right now, THQ is the mostly likely publisher to disappear from this list in the next year (Take-Two's CEO just bet on it). But despite the challenges, I think THQ could survive. Their restructuring plans are certainly good ideas, they just might have come too late. To work, those plans will require a lot of sacrifices, including the loss of staff that we’ve seen.

Instead of dwelling on the current, obvious state of the publisher (which is bad), let’s look at where they could be in a few months if they have the time to finish restructuring.

The basic idea behind THQ’s change is to trim down. They were a big company, with lots of licensed games, a tablet series, and a number of more core titles. Most of those pieces were not profitable, so THQ is cutting the excess junk and focusing on the few core titles that resonate with fans. It’s a smart idea, but again, it requires them to cut a lot of staff. They have already closed Kaos Studios in New York (which is a shame, since Kaos did well with Homefront), laid off a ton of support/sales staff, and have downsized developers like Volition and Vigil.

So what are they focusing on now? A set of core titles that actually do represent some diversity (from a genre/portfolio perspective) and opportunity for success. Their action titles Darksiders and Saint’s Row are foremost among these. Saint’s Row: The Third was well received, and is probably the most widely liked series among gamers. Darksiders earned good reviews and decent sales with its debut, but the sequel due out this summer looks to expand in every possible way - expect another hit there.


THQ is putting its weight behind Homefront as its marquee shooter, which is a smart move in my opinion. The first title was surprisingly good, and with Crytek involved in the sequel, it should only get better. They also have the sequel to Metro 2033 (which is one our staff's most anticipated games of 2012) and Volition's new game inSane coming in the next year, and they may choose to revisit the Red Faction franchise in the future.

The company has scattered presence across other genres. The Juiced series and Motocross series represent their racers, while the WWE and UFC series are their fighters. They have a Warhammer RPG on the way, while Dawn of War, Company of Heroes and Rise of Nations form their strategy stable. These may not be blockbusters, but they show diversity and potential.

The new THQ could emerge looking more like a Bethesda, Square or Warner Bros. None of those companies succeed by being massive or challenging the megapublishers. They focus on a smaller number of core titles, with some proven talent behind them. The current fears about THQ also make me think of Take-Two four years ago. They were dealing with a hostile takeover attempt by EA, and we thought the publisher would be absorbed within months, its IP divided up and sold to the highest bidder.

But Take-Two resisted the offer, and continued to build success around some original IP. Within three years of that takeover attempt, they hit it big with Borderlands, Red Dead Redemption, LA Noire, and they transformed BioShock from a cult classic to a blockbuster franchise. I’m not saying THQ will grow the way Take-Two did, but the fortunes of publishers can change quickly if they are willing to reward talent and focus on what works.

Despite these observations and the potential for THQ to recover, their current state is less rosy. So for now, they definitely belong in this category of publishers. But don’t be surprised if they’ve risen a few categories within the next year or two.

  • Strengths– Continued success of Saint’s Row and Darksiders, Homefront 2 deal with Crytek, diverse portfolio with respectable titles in many genres, a smart restructuring plan that focuses on core titles and real talent
  • Weaknesses – Recent financial troubles have killed THQ’s stock value, may collapse or be bought out soon, the need to convert their Warhammer MMO to a single-player RPG


The bigger they are, the harder they fall. No publisher fits that cliché like modern-day Sega (though Atari comes close). Sega used to be the top dog in the industry, as they developed their series of consoles across numerous generations. But as most gamers already know, something went wrong with the Dreamcast, and one of the oldest and most respected console manufacturers suffered.

Sega has been downgraded to just another publisher for most of the latest two console generations. So how have they fared with that new role? This recent news blurb on the financial struggles of Sega gives us an idea – layoffs and game cancellations are never a good sign.

I’d like to take some of the blame off of Sega, and say that the changing industry played a role. It seems that mature action games are the key in today’s world, and that’s never been Sega’s strong suit. But that’s never been part of Nintendo’s strategy either, and you don’t see them on this list (in fact, they are in the top tier of publishers). So what is Sega doing wrong?

For one, they don’t have much for new IP. Looking at a list of Sega’s top franchises, they have all been around for at least a decade, most for multiple decades. One noticeable exception is Bayonetta, but the sales for that title have not matched the critical success. And one success in a decade of publishing does not show a forward-thinking company.


What are their top franchises then, and are they diverse? They have the iconic Sonic of course, and the fan-favorite Shenmue series. They have the Total War RTS series, and their  Sports Manager and Virtua Sports titles. They have Sega Rally and Virtua Racing, along with Crazy Taxi, for racing/vehicle games. Phantasy Star and Skies of Arcadia mark some of their recent RPG successes. Then there is Virtua Fighter and their horror titles like House of the Dead and Condemned.

A big list, and spread out along a great many genres. But looking at the list again, how many of those games have really been relevant in this generation? How many have hit blockbuster status, or drew big presales, or made an impact at all? Aside from the Total War games by Creative Assembly, there isn’t much. This is one example where a diverse portfolio does not mean a strong one.

Sega has made a lot of miss-steps trying to market and make sequels to these franchises as well. It seems Sonic fans come from so many different directions that no sequel will please them all. Sega continues to try, but the Sonic fans I know are getting fatigued. For some reason, Sega tried to market its most mature games (Madworld, House of the Dead) to the causal crowd on Wii, while ignoring the HD consoles that actually have successful third-party games. None of the other titles have seen enough innovation or changes to excite any but the most loyal of fans. That long list of old franchises hides a company that is desperate for some big hits.

I think we have yet to see how serious Sega’s recent struggles really are. They might just be trimming down, to face the realities of the modern industry. Development costs are high, and they can’t afford to churn out half-hearted sequels. In the statement about their cuts, Sega talked about focusing more on their best franchises. Like THQ, this could yield a smaller, stronger company in the future. But as a Game Informer editor recently pointed out, Yakuza and Bayonetta weren’t mentioned as strong franchises, which makes us wonder whether Sega really understands what it’s doing...

Sega has been a cornerstone in the games industry for years, and its legions of fans won’t let the company die off completely. But unless something turns around, Sega could be in for a long slide.

  • Strengths – Sonic the Hedgehog, the Total War series, Yakuza and Bayonetta action titles, diverse portfolio
  • Weaknesses – Most of that diverse portfolio is old and stagnant, lack of innovation in key franchises, questionable marketing/management decisions

3. Tecmo

Despite all the recent talk about THQ going under, I still think Tecmo is the weakest publisher on this list.

Like Namco, Tecmo started out as little company with nothing to do with gaming (1967 – supplied cleaning equipment). But Tecmo didn’t buy part of Atari to get a jump start on gaming. And unlike Namco, they never hit the explosive growth point due to some amazingly popular arcade machines.

And to this day, Tecmo still has little to impress. The two most well-known and impressive franchises the publisher has are Ninja Gaiden and Dead or Alive. Both of these came from Team Ninja, and both were the brainchild of Tomonobu Itagaki. Itagaki may be brash and outspoken, and he seems to think he’s a rock star, but he was to Tecmo what Miyamoto was to Nintendo. He gave them their hits, their imagination, and much of their revenue.


Beyond Itagaki’s fighting series (he still maintains DoA 4 is the “greatest fighting game that will ever be made) and tie-in action series, Tecmo has nothing to brag about. Dynasty Warriors and Monster Rancher are the only two widely-known franchises still being developed, and both have been criticized for their lack of innovation over the years.

But this severe lack of depth and diversity is not Tecmo’s only problem. They have made two big attempts in the last couple years to get into the shooter market. One attempt was Quantum Theory, a Gears of War style game that garnered a whopping 38 metacritic score (and comparably bad sales). The other was Metroid: Other M, which according t0 this review, ruined one of gaming’s most revered characters and ran a beloved franchise into the ground.

With such a terrible track record, you would expect Tecmo to hold onto their only quality developer (Itagaki) for dear life. But on the contrary, Tecmo got in a fight with their top dev and he quit the company. Tecmo had no choice but to soldier on without the man, and Ninja Gaiden 3 just launched recently. You can see here how dismal the reviews were; another great series is being run aground.

With their best developer gone and the reputation of half their good franchises (1 of 2) besmirched, things don’t look good for Tecmo. I’m shocked we haven’t heard more bad news about them by now, but just wait, it will be coming. Maybe Square Enix will make another offer to buy them out... Dead or Alive 5 with cameos by Cloud and Lara Croft? Yes please!

  • Strengths – Ninja Gaiden & Dead or Alive series, a reputation for “hardcore” games
  • WeaknessesExtremely limited portfolio (both in genres and in number of franchises), loss of their best developer, reputation for difficulty scares away casual customers, Ninja Gaiden’s recent dud

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That wraps up the evaluations of the industry's current weakest players. But as I said for some of these publishers, especially THQ, change could be coming. Six months from now (or even one month, after the shifting landscape of E3), we could have three different publishers on this bottom stair. And again, we'd love to hear your comments and feedback below, especially regarding the survival chances of these companies.

Check back in a week for Part 2, when we look at a set of publishers that are much more stable, but are struggling to expand in the fiercely competitive gaming industry. Will your favorite company be listed among the "try-hard" publishers?